My Insurance Story

Written by Posted On Thursday, 12 May 2022 00:00

Okay, I want to tell you a story about what happened to me just the other day. I went for my annual physical and everything looked fine. Also did a complete set of blood work that looked at pretty much everything. But here's the story.

I have a primary policy which covers the bulk of a doctor's visit. As with most insurance policies, should I have to go into the hospital for anything more than what a visit to the clinic would cover, my primary coverage only covers most of it, but not all of the entire hospital tab. That's where my secondary policy comes into play. My secondary policy covers everything that my primary would not. But I did have some questions about the secondary policy. Just the procedure and when and how the secondary policy would kick in. So I called the insurance company. After about two minutes, my head was spinning. 

I had absolutely no idea what the insurance representative was saying. Not only that, but the speech pattern was extremely rapid. Which makes sense because these people have gone over this same routine hundreds of times. It's almost like a speech they memorize.

But here's some of what she said. "You'll need to contact your PCP and request a written referral form. You'll need to establish your very own 'chart.'"

Okay, I said, but what is a chart? I mean, I know what a chart is, generally, but specifically what has it to do with my insurance coverage? "It's just establishes a new record for us at the hospital with all your information on it," she replied.

"Okay," I said, "what's a PCP?"

"That's your primary care physician."

"You mean my doctor, right?"

"Right. You need to have your PCP set up a chart for you."

"Okay, but my question is how does secondary coverage work?"

She then went on, about 100 miles per hour, attempting to explain the process but the response was chock-full of so much industry jargon that most of it went in through one ear and out the other. We ended the 15 minute conversation and I learned absolutely nothing.

Now, what does this have to do with mortgages?

When you have your initial conversations with your chosen loan officer, it's possible the loan officer will also use industry jargon. Terms you're not used to and may not clearly understand. Loan officers make this same speech hundreds of times. It's rote. But if you're not careful, you'll end the conversation learing very little. Maybe even your initial question wasn't sufficiently answered.

This is the loan officer's fault, not yours. It's imperative that you completely understand what's being communicated to you throughout the entire process, from application to final funding. Loan officers are humans too just like the insurance lady who attempted, but pretty much failed, to explain how secondary coverage woks.

If, during your conversation, words seem to be flying about with little to no meaning, slow the process down. Ask the loan officer to repeat what was just told to you, only slower and in everyday language. You're about to borrow a lot of money and commit yourself to monthly mortgage payments. Be crystal clear from the get-go.

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David Reed

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor's Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. As a Senior Loan Officer and Mortgage Executive he closed more than 2,000 mortgage loans over the course of more than 20 years in commercial and residential mortgage lending. 

He has appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show. His advice has appeared in the New York Times, Parade Magazine, Washington Post and Kiplinger's as well as in newspapers and magazines throughout the country. 

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